As the global housing market shows some signs of recovery, markets are re-emerging at different speeds, depending on the strength of individual real estate fundamentals. Moreover, industries that rely on the housing market have adjusted to lower demand and will likely stay cautious until they see clear signs of a rebound, says Standard & Poor's Ratings Services in a special report on the global housing market. A separate report shows that one in every 136 households with a loan got a foreclosure notice in Q3, the third quarter.

The report, "Rebuilding The Global Housing Market," which is only available to subscribers, examines the housing market across different regions as well as its impact on various asset classes and industrial sectors.

The US housing market, for example, has shown some momentum. Housing starts and home sales are climbing back from lows early this year, and home prices are rising after sharp drops that began in 2006.

"Prices may suffer a setback this winter, in part because unemployment, now 9.8%, is still rising,"said Standard & Poor's chief economist David Wyss.

Moreover, an $8,000 federal tax rebate for first-time homebuyers is scheduled to end in November. And foreclosure filings in the third quarter were at record levels.

"Rising unemployment and a new variety of mortgage resets continue to gradually shift the nation's foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave," said James J. Saccacio,  chief executive of tracking firm RealtyTrac, in the company's quarterly Metropolitan Foreclosure Market Report.

US unemployment reached a 26-year high of 9.8% in September and the broad measure, including temps who want full-time jobs and discouraged workers, was 17%.

Foreclosure filings, including notice of default, auctions and bank repossessions, rose 5% in the third quarter from the prior quarter and 23% from a year ago, RealtyTrac reported earlier this month.

One in every 136 households with a loan got a filing in the quarter, a record since the firm began tracking them in the first quarter of 2005. Filings were reported on more than 937,000 properties in July through September.

US prices over all are back to where they were in late 2003. Some cities have been pushed down even more: In Cleveland, prices are at 2001 levels; in Detroit they’re at 1995.

On Tuesday, S&P published the August Case-Shiller home price indices, which show from the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through August 2009 are -30.2% and -29.3%, respectively.

S&P says for a few US homebuilders, credit quality is firming, though that could change in the months ahead, as the negative outlooks on 11 of the 15 homebuilders we rate indicate. Despite signs of a slight real estate rebound, they say their ratings on many of these companies will likely remain under pressure through the balance of the year and probably into 2010.

US foreclosure hot spots. Click here for bigger map.

In Europe, the housing outlook is mixed. UK housing prices are rising modestly, though that may be a sign of tight supply. But overall, European real estate fundamentals remain weak. Feeble employment prospects and
restricted levels of mortgage financing, along with a likely easing of fiscal stimuli and rising interest rates, promise to make the road to recovery long- -and possibly could result in backsliding. House prices are still slipping in Ireland and Spain, while prices in France appear to have hit bottom and may stay there for a while. S&P says the reported arrears, or missed payments, on loans backing European securities that the company rates may have risen sharply, but more recently, the situation may be improving.

Elsewhere, the Japanese real estate market remains depressed due to the weakened economy. Land prices have continuously declined for the 12 months starting in July 2008, though there have been signs in recent months that prices may be bottoming out.